We explain what an organization chart is, its characteristics and its importance. Also, the types of organization chart that exist.
What is organizational chart?
An organization chart is a diagram or graphic representation of the structure of an organization which reflects the departments with their respective person in charge and how each area relates to each other.
For example: in the organizational chart of an educational institution, the management department will be placed first. Other departments, such as the teaching team, maintenance or secretariat, are located below the management box linked by an arrow, because these sectors report to the director.
Furthermore, an organization chart can reflect a series of steps to follow between different sectors during a work process.
For example: a company that offers logistics services receives the goods, organizes them in different warehouses according to product categories, invoices them and dispatches them. An organizational chart allows any employee to access work process sequence information:
See also: Administrative process
Characteristics of an organization chart
Organization charts vary depending on the type of organization, such as a business, school, or nonprofit.
However, there are some characteristics common to all organizational charts:
- An organization chart graphs the departments of an organization, according to their level of hierarchy.
- Each department is marked with its person in charge.
- Each department is connected, through an arrow, to the area to which it must respond.
- It is a tool that shows the organization's way of working.
- It is a tool that must be updated as structural changes occur in the organization.
Importance of an organization chart
An organization chart is important because it is a tool that shows or reveals the structure and size of an organization both to employees and to external people who access that information.
In addition, having a diagram of the different areas and functions that make up a company or institution allows analyzing changes or improvements in the structure with the aim of optimizing its performance.
It is important that the organizational chart is kept up to date as time passes and the organization modifies its departmental structure.
Types of organizational chart
The main types of organizational chart, depending on their function, can be:
- Analytical organizational charts. Its function is to corroborate a work process between the departments involved in the task, through a series of arrows that connect the areas.
- Informative organizational charts. Its function is to be a cover letter with simple to understand information. It is aimed at people outside the organization, such as large companies, which include the organization chart on their websites so that users can gauge the magnitude of the company.
Depending on the type of structure, organizational charts can be:
- Vertical Organization Charts. Its function is to demonstrate the level of vertical hierarchy, that is, that all decisions depend on management.
- Horizontal organizational charts. Its function is to represent the level of hierarchy under a horizontal order, that is, different areas are taken into account for decision making.
- Circular organizational charts. Its function is to represent the different sectors, working at equal levels of hierarchy and in a fluid manner with a management department involved, no longer vertically or horizontally, but as a central part of the work cycle.
Reference
- Economy from home (2022). Organization chart of a company and its types – Business Economics (video). https://www.youtube.com/
- Chen, J. (2022). Organizational chart types, meaning and how it works. https://www.investopedia.com/
- Cambridge Dictionary (2023). Organization chart. https://dictionary.cambridge.org/
